Startups in the music industry can now apply for new loans of up to £25,000.
The loans will be administered by the Association of Independent Music (AIM), which has become a delivery partner for the government’s Startup Loans scheme.
Most of the scheme’s delivery partners concentrate on geographical areas, but AIM will extend loans to music businesses across the country.
How does the scheme work?
The AIM Start Ups Loan scheme will fund new businesses in the music industry. It is part of the government’s own Startup Loans scheme, one of the coalition’s flagship business policies.
Under the AIM scheme businesses will be able to apply for a loan of up to £25,000, repayable over between one and five years. The loan will be available at a fixed interest rate of 6 per cent. The average loan amount “across the board” is £5,700, and loans of more than £7,000 will need to be assessed by both the AIM panel and Startup Loans themselves.
A range of support and mentoring is also available as part of the package. Applicants will receive help in developing their idea, building their business plan, and strengthening their cashflow forecasts, in advance of their pitching meeting. Loan recipients will also receive further support in specific areas of business. In the case of the AIM loans some of these sessions will focus on aspects of business specific to the music industry.
It is important to understand that the Startup Loans scheme offers personal, unsecured loans. There are several implications of this. The first is that if you are starting a business with a partner, you can each apply for an individual loan in order to maximise the cash at your disposal. However, it is vital to remember that you are personally liable for the loan, and that if the business fails you will still be expected to make repayments.
Am I eligible?
There is a range of criteria that you and your business must fulfil in order to be eligible for an AIM Start Ups loan. Primary amongst these is that your business must have been in operation for less than 12 months. The loans are available for startup activities, rather than for expansion.
Applicants must also be aged 18 or over at the time of the application. You should already have a business idea, although it is not necessary for you to have a completed business plan.
Finally, and perhaps most importantly, your business must operate in the music industry. Although press coverage of the AIM Start Ups scheme has suggested that this could focus on music tech businesses, the eligibility criteria on the AIM website do not specify what type of music businesses the scheme will be funding.
How do I apply?
You can make an application for an AIM Start Up Loan on the dedicated website. You will need to give a basic outline of the nature of your business, what it will do, the market for your product or service, and the amount you want to borrow.